WB on path from good governance to humane governance

By Muhadi Sugiono

YOGYAKARTA (JP): The World Bank and International Monetary Fund (IMF) reaffirmed their commitment to the adoption of good governance. In his closing remark at the annual financial meeting in Hong Kong on Sept. 25, IMF Managing Director Michel Camdessus said that good governance constituted a necessity not only for moral but also for economic reasons.

What Camdessus was referring to when he stressed the importance of good governance, however, was only one aspect of good governance which the two financial institutions were supporting.

It is an aspect of governance related to the provision of legal and institutional frameworks for the operation of the market economy related to the World Bank's and IMF's institutional and managerial roles.

The other aspect concerns a wide range of issues beyond those technicalities and cannot therefore be publicly endorsed.

Put simply, it is that plus the establishment of civil society which brings their notion of good governance closer to that of humane governance.

This article discusses the transformation of the conception of good governance adopted by the two international financial institutions, but, for a very practical reason, will be focused on that of the World Bank.

The bank has long been criticized for its adoption of a rather narrow conception of good governance, that is, managerial and institutional issues.

These technical issues usually relate to the formal, instrumental or substantive (content) requirements for the existence of a system of law.

They also relate to such policy suggestions as bureaucratic and public administrative reform, budgeting, public sector's efficiency and so on.

The bank, however, has every reason to adopt this narrow conception of good governance. It is officially constrained by its articles of agreement from dealing with noneconomic issues.

In fact, the designers of the bank, like John Maynard Keynes, conceived and idealized it as a neutral institution when it came to interests, politics or ideologies.

The watershed of the bank's conception of good governance emerged with the publication of its 1989 report, Sub-Saharan Africa: From Crisis to Sustainable Growth.

The report clearly marked the bank's departure from its previous thinking on good governance. In the report, the bank characterized chronic African development problems as a result of inappropriate economic policies and, more importantly, a 'crisis of governance'.

What the report means by a 'crisis of governance' is quite obviously a wide range of political crises as manifested in the crisis of legitimacy and participation as well as in the crisis of the implementation of democracy and human rights.

Its finding of the crisis of governance as a key factor in African development problems inevitably led the bank to suggest political reforms as much as economic ones.

What most African states needed was 'political renewal', the report said, that was the construction of a more 'pluralistic institutional structure'.

This means that, for the bank, the building of civil society and effective democratic practices must necessarily precede the attainment of sustainable development.

As a consequence of its expansion of concern, that is to include its concern on the importance of civil society as part of good governance, the bank actively supports various voluntary organizations and non-governmental organizations (NGOs), universities, trade unions and other society-based organizations.

The bank also vigorously promotes the adoption of accountability, legitimacy, participation and transparency as strategies to empower civil society and to reduce the power of the state.

In short, the 1989 report suggested the necessity to systematically rebuild those African states from the bottom up.

This clearly indicates that there has been a significant shift in the bank's conception of good governance since the end of the 1980s, a shift from dealing merely with technical issues to include more sensitive political issues.

More specifically the bank is increasingly concerned with civil society and its importance to development.

As such, it is quite interesting to make a comparison between the bank's current conception of good governance and that of humane governance, a concept introduced by The World Order Models Project of the Global Civilization Initiative as written in its report in 1995, On Humane Governance, by Richard Falk.

What does the shift of the bank's thinking on good governance mean? Does good governance constitute Falk's humane governance? How humane is the bank's good governance?

Falk's humane governance is defined as both a process and a goal. It is a set of social, political, economic, and cultural arrangements that are committed to rapid progress along these five dimensions of assessment.

In other words, it is the arrangement to achieve comprehensive rights for all people on earth, though its main focus of governance is the most vulnerable and abused.

To the extent of which the bank's good governance is concerned with the empowerment of civil society, it is undoubtedly a humane governance of some sort.

The bank's good governance, however, has been criticized for being derived from a liberal tradition. The bank has been accused of only wanting to empower civil society (more appropriately, certain segments of civil society) so long as it supports the bank's modernization projects.

The bank's conception of civil society, therefore, does not consist of traditional, effective or community groups. Rather, it consists of contractual, noneffective and noncommunity groups.

Within this category of civil society are professional groups, trade unions, business associations and other voluntary organizations, but not organizations representing the weak and unfortunate.

Against such criticism, the bank has argued that though the bank's good governance is undoubtedly liberal in origin, its market-friendly policy recommendations have not been so much derived from political or ideological considerations as from technical and efficiency considerations.

Similarly, it seems to be quite unfair to characterize the bank as being ideologically die-hard. It is not difficult to support this claim. The bank is not insensitive to critical views.

Facing NGOs' strong criticism of its structural adjustment and impact on the poor in the 1980s, the bank has shown its willingness not only to talk to its critics but also, more importantly, to accommodate their concerns by giving greater attention to the poor as manifested in its programs for poverty alleviation, health promotion and education improvement.

Besides, the bank also seeks to increase its cooperation with NGOs by involving them in its projects and by recruiting personnel from NGOs.

All this indicates that the bank's good governance is going along the path of humane governance. The bank's good governance might not be humane governance yet, but a humane character is certainly there.

The writer is a lecturer at the School of Social and Political Sciences, Gadjah Mada University, Yogyakarta.